What is a pension fund?

A pension fund is one of the savings channels for retirement age, providing financial security to employees who set aside money for the pension fund over the course of their years of work – pension savings. On reaching retirement age – namely, 67 for men and 64 for women – the pension fund guarantees them payment of a monthly pension for the rest of their life.

A comprehensive pension fund is a combination of retirement savings and insurance. The savings component guarantees an old-age pension after one retires from work, and the insurance component enables coverage in the event of illness, accident or death, a disability pension and a survivors’ pension.

A pension which does not contain the insurance coverage but only the savings component is called a basic pension.

What is the meaning of the insurance component in the pension fund?


Disability insurance

The fund provides insurance coverage in the event of disability, guaranteeing a monthly pension in the event of prolonged injury to the employee’s earning capacity due to illness, accident and the like.


Survivors’ pension

The pension fund also includes a survivors’ pension in the event of death before reaching retirement age. In such an eventuality, the beneficiaries will receive a monthly pension – children until they reach the age of 21, and the spouse for the rest of their life.


Old-age pension

The amount of the old-age pension is determined according to the amount of money accrued in the savings over the years up to retirement age. The amount also depends on the number of years during which the money was deposited, the monthly deposit amount and the continuity of the savings. The more regularly you make deposits, for more years and at higher deposit amounts – the larger the amount payable to you when you retire will be.


Pension fund management 

Supervising, auditing and monitoring your pension fund to make sure it’s earning you money

You shouldn’t think of your pension funds as being optimally “self-sufficient”. Proper planning, supervision and monitoring will utilize the market fluctuations and the changing reality to maximize the funds’ abilities.


Decreasing management fees to the minimum amount possible

Kali Group has operated in Israel for over 50 years now. Our scope of managed assets is 25 billion shekels. We have tens of thousands of private clients, hundreds of organizations and companies, with the numbers growing every year. This fact enables us to get you the lowest management fees among all pension funds. Nevertheless, we do not collect management fees from you.

What if you’re not our client? Management fees are certainly not set in stone, and you can try to negotiate their amount. Our pension fund may collect management fees of up to six percent from the current monthly deposits and up to half a percent from the accrual funds – if the pension fund in question is a new one.


A managed pension fund is a fund responsive to changes

The amount of the contribution to the pension should be responsive to changes and to the changing needs. There are personal change factors such as a change of one’s place of work, increased or decreased wage, changes in one’s marital status, having children, et cetera. There are also external changes, such as fluctuations in the capital market, the quality of provident funds’ performance, stock exchange upturns and downturns, and various political situations both worldwide and in Israel.

Kali’s pension experts are experienced and proficient in pension fund management and have a deep understanding of the history, present and future of Israeli pensions. Our strategic team will plan, recommend and monitor your pension assets.


When it’s right for you – we’ll also handle your move from one pension fund to another

Since October of 2003, following a reform by the Ministry of Finance, you can switch between new pension funds (funds opened from 1995 and onward). When you switch funds, you retain all the rights and seniority accrued to you, and the transition does not involve costs or commissions.

When can’t you move to another pension fund? When you have an old-age pension and/or disability pension from the pension fund, or when attachments have been imposed on the pension fund.

Should I switch pension funds?

You should and are even advised to do so if your fund does not realize your retirement vision and your future financial goals.


How can I know if my pension fund is a good fit for me or not?

That is exactly what Kali’s experts do for a living. One of our key concerns is for your pension to be the most accurate fit for you, and always gaining you the maximum benefits possible in relation to your personal attributes.


Proper strategic planning, which gives you recommendations according to your personal snapshot, in conjunction with monitoring and supervision of the funds’ performance, will lead you to realize your financial goals in your retirement years.

Articles on Pension Savings